Peru's President Pedro Castillo says he has accepted the resignation of his hard-left prime minister, decrying political "instability" after only two months in power, suggesting his government will adopt a more moderate stance.
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Prime Minister Guido Bellido was little-known before taking the role, but his brash style rattled the opposition-led Congress as well as investors made nervous by a far-left administration.
In a tweet after the announcement, Bellido said he would fight back and posted a picture of fighting from the movie Gladiator, in what was viewed as a hint at challenges ahead for Castillo.
Like the president, Bellido is a member of the Marxist-Leninist Free Peru party, although he was seen as a far-left member of the government in comparison to the more pragmatic Castillo.
Financial markets are expected to react to the news on Thursday.
Bellido's appointment in late July triggered a widening in bond spreads and weakened the currency. The local sol lost close to seven per cent through the last quarter and on Wednesday ended near its record low against the US dollar.
Castillo said he would swear in a new Cabinet on Wednesday evening, raising questions about whether he would shift his administration toward the centre.
President of Congress Maria del Carmen Alva, a member of right-wing Accion Popular, said on Twitter she supported Castillo's decision to replace Bellido.
In recent weeks, Bellido had talked openly of nationalising Peru's natural gas resources, operated by a consortium led by Argentina's Pluspetrol.
He had also defended his labour minister, who had been questioned by Congress in a formal hearing for allegedly having been a part of a Maoist insurgency in his youth.
"The balance of powers is the bridge between the rule of law and democracy," Castillo said in a message to the nation announcing Bellido's resignation.
"Votes of confidence, (Congressional) hearings and censure should not be used to create political instability," he added.
Castillo said his government supported the role of private investment in Peru.
Australian Associated Press